Every two months, we survey 600 mid-sized business leaders across the country to understand their expectations and priorities for the future.

We use this data to track changing market sentiment over time and explore topical issues and challenges facing mid-sized businesses in the UK.

Here's what the latest October survey told us.

UK economic outlook

With inflation surprisingly stalling in September, optimism about the UK economy has decreased significantly in October, to an almost record low of 58%. This is a -21 percentage point (pp) decrease compared to the last round in August and is -11pp lower than the rolling average since the Tracker began in January 2021. Those who are pessimistic also almost tripled by more than half in October, up to 15% of respondents.

Optimism on the outlook of the UK economy over next 6 months

Revenue growth

The October Tracker saw optimism around future revenue growth decrease -23 percentage points (pp) from the last round in August. Optimism is now at an almost record low and is -10pp below the rolling average. The level of respondents pessimistic about their growth, which had been falling since the start of 2023, more than doubled this round reaching a high not seen since October last year.

Optimism on business revenue growth over next 6 months

Funding position

With interest rates high and likely to remain so for the near future, businesses’ confidence in their funding position has decreased -24pp since August, reaching the second lowest level recorded by the Tracker. The number of those pessimistic in their position has also more than doubled, from 5% to 12%, the highest level seen since October last year.

Optimism on business funding position over next 6 months

Profit expectations

Profit expectations dipped in October compared to the previous round but are still at a relatively high level, with 66% expecting to increase profits - this is significantly higher than the rolling average (55%). There was a slight increase in the number of respondents expecting their profits to decrease (15%), but this is still the second lowest number recorded by the Tracker.

Profit growth expectations over next 6 months

Schellion Horn, Economics Consulting Partner at Grant Thornton UK LLP

  • Schellion Horn, Economics Consulting Partner at Grant Thornton UK LLP

    “While optimism has remained relatively high in our Tracker for the past 18 months, despite the economic challenges faced, this was likely due to many businesses having their funding locked in but it’s likely that high interest rates are now really biting. Funding costs are rising and covenants are tightening and so businesses are finally feeling the squeeze. And with inflation stalling unexpectedly in September, the Bank of England has now held interest rates for the second time in a row."


    “The drop in optimism may also be exacerbated by fears around rising energy prices as we head towards winter, amid growing international conflict, and the potential impact this could have on inflation and their cost base. While winter is often the busiest quarter for many businesses, the potential rise in energy costs for both businesses and consumers, may be making many nervous about the knock-on impact on sales."  

Business investment expectations

As confidence falters across the market, investment expectations have also stalled, with fewer businesses planning to increase investment across all areas monitored by the Tracker. The biggest falls were seen in international growth, skills development, ESG and technology. No areas monitored by the Tracker saw an increase this round in the number of respondents planning to boost investment levels over the next six months.


“Businesses should refrain from pausing or reducing investment too much. While it may save costs in the immediate term, decreased investment in core areas means it’s unlikely they will be in a position to come out strongly the other side – resulting in some winners and losers.”

Schellion Horn, Economics Consulting Partner at Grant Thornton UK LLP


Lending under pressure in the mid-market

This round, we also asked business leaders to share the actions they have taken to manage the impact of high costs and rising interest rates.

Here's what we found out:

  • Many businesses have either already restructured their operations or have plans to do so.

  • Almost half have reviewed their non-essential spending in a bid to manage costs.

  • Businesses are looking for solutions to improve performance amid a tightening of spending. Over half have invested in productivity, efficiency and automation, and a further 40% have plans to explore options in this area.  

  • As businesses continue to work through this challenging period of high costs, almost three quarters anticipate that they will need to raise additional funds over the next year.

  • But this may be challenging for many, as a quarter of respondents agree that accessing finance is becoming more difficult.

Jon Bramwell, Debt Advisory Director, Grant Thornton UK LLP

  • Jon Bramwell, Debt Advisory Director, Grant Thornton UK LLP

    “The combined effect of increasing borrowing costs and wider economic pressure on businesses means that the high street banks are finding it more difficult to lend to mid-sized businesses. This is particularly true for companies in sectors that are more challenged including manufacturing, hospitality, retail, construction and real estate. This poses a challenge for businesses needing to extend their existing borrowing arrangements or raise new capital when they no longer fit what their traditional lenders are looking for. 


    “However, the business finance market is undergoing constant evolution with a wide range of lenders, including challenger banks, asset-based lenders and private lenders, now actively looking to help businesses which the high street banks no longer feel able to support. This creates all important options to access capital for mid-sized organisations and much needed flexibility when it is most needed."


Planning for success in 2024

Our latest Business Outlook Tracker indicates that the number of businesses feeling pessimistic about the economic outlook of the UK has almost tripled since August.

To help you navigate these challenges, on 29 November our experts will be sharing their insight on the current economic outlook and discussing what actions businesses need to take to succeed moving into 2024. 

Business growth expectations plummet as winter approaches and interest rates held

The latest research from Grant Thornton UK LLP’s Business Outlook Tracker finds that, as we head towards winter and interest rates are held again, optimism has plummeted across the mid-market.